Interstellar aims to soar past US rivals in small rockets

TOKYO -- In the growing business of private space, small, relatively cheap rockets are a particular area of interest. Japanese startup Interstellar Technologies has jumped in and is trying to close the gap with its U.S. competitors.

Although Interstellar, based on the northern island of Hokkaido, saw the first launch of its Momo rocket fail, it has no choice but to keep honing its technology and cutting prices. Competition in commercial space is relentless.

Ground control in the town of Taiki in Hokkaido lost contact with Momo just 66 seconds after liftoff on Sunday. The rocket had reached an altitude of 10km when telemetry from the vehicle suddenly stopped.

"The failure at an altitude of 10km means that the rocket was traveling at a speed of Mach 1.3 and was exposed to the highest air pressure," said Interstellar CEO Takahiro Inagawa at a news conference after the launch. "There is a possibility that the body of the rocket was damaged and the wiring was broken."

The plan was for the rocket to climb to 100km, the boundary between Earth's atmosphere and outer space known as the Karman line, about four minutes after liftoff. But the vehicle only made it about one-fifth that distance, about 20km above sea level.

"We at least confirmed that the engine itself, which is the heart of a rocket, demonstrated its thrust in line with what we achieved in our tests," Inagawa said.

Entrepreneur Takafumi Horie, who was involved with Interstellar's founding, said the company will develop another rocket in about three months.

Momo is a "sounding" or research rocket designed to carry instruments for Earth observation, such as physics experiments by universities. But Interstellar's ultimate goal is to develop a rocket that can lift satellites into orbits of 500km or more.

Smaller is better

Despite the setback with its first launch, Interstellar must speed up its development efforts because the race to create the next generation of small, satellite-launching rockets is intensifying.

The launch business for observation and communications satellites using small rockets is growing, with U.S. companies leading the way. There is pent-up demand for rockets that can put small satellites weighing 50kg or less into space.

"Whoever I speak to, such as Earth-observation service companies in the U.S., says they want to use ultrasmall satellite-launch rockets as soon as someone perfects one," said Masaki Tanabe of Marubeni's aerospace and defense systems department, which is an investor in Interstellar. Momo's launch thus attracted attention from potential users overseas.

U.S. research company SpaceWorks Enterprises forecasts that demand for ultrasmall satellite launches will increase threefold from 2015 to 435 launches by 2022.

U.S. telecommunications startup OneWeb has plans to put a huge number of satellites in orbit to provide broadband internet connections anywhere on the planet.

At present, all satellites, regardless of size, are launched on large rockets. But what businesses want are rockets that can get off the ground on short notice relatively cheaply.

For commercial space companies that means mass-producing rockets for frequent, low-cost launches. Small rockets that can lift small satellites into space are the holy grail.

Masashi Sato, a senior consultant at Nomura Research Institute, said he knows of no such rocket being successfully commercialized anywhere in the world, even as the global space industry grew into a $322.2 billion business as of 2015.

So all eyes are focused on who will be the first to perfect a rocket assembly line. Commercial space players are working on rockets "that can be mass-produced like the Super Cub," said Interstellar's Inagawa, referring to Honda Motor's lightweight, inexpensive motorcycle that has been popular around the world since its debut in the 1950s. Creating such a rocket means developing the technology and ensuring that costs are low.

Momo was built using highly reliable off-the-shelf personal computer components. Interstellar launches cost less than 50 million yen ($452,000), less than the Japan Aerospace Exploration Agency, or JAXA, charges to launch a rocket of similar size. Interstellar aims to cut its costs to just "one-tenth that of JAXA rockets," said Inagawa

The company intends to continue to sharpen its production processes with the aim of manufacturing price-competitive rockets for small satellites by 2020.

The cost of launches is expected to fall as their frequency increases, according to Masayasu Ishida, a senior consultant at A.T. Kearney. He said the intensifying race to build small rockets, led by U.S. companies, is a sign that a "revolution in the access to outer space is underway."

Advance orders

Inagawa said he sees U.S. aerospace company Rocket Lab as Interstellar's main competitor, "although they are moving ahead of us because they are conducting launch tests."

In May, Rocket Lab launched its first small rocket, the 17-meter-long Electron, in New Zealand, but the vehicle failed to reach the altitude necessary to release a satellite. It was, however, a showcase to the world.

The company used a 3-D printer to manufacture engine components for the vehicle, which is designed to carry satellites weighing up to 150kg. The launch was estimated to cost less than $600 million. This is the figure Interstellar will have to bear in mind as it moves from sounding rockets to satellite launches.

While none of the small-rocket developers has succeeded in putting up a satellite, many have already accepted advance orders. They aim to lower prices by cutting unit-costs through mass production.

Rocket Lab, for example, has orders from Spire and Planet, two American satellite startups, while Vector, another U.S. player, has orders from NASA, as well as American and Finnish companies.

A.T. Kearney's Ishida said Interstellar needs to work harder to win business, rather than simply focusing on technology development, if it wants to compete successfully with its U.S. rivals.